Sunday, November 24, 2013

Ferguson v. Williams case brief

Ferguson v. Williams case brief summary
670 S.W.2d 327 (1984)


CASE SYNOPSIS
Appellants sought review of a decision by the 53rd Judicial District Court, Travis County (Texas), which entered judgment against appellants in appellee's action to recover funds invested in a joint venture between the parties.

CASE FACTS
Appellee instituted an action to recover funds invested and expended by him in a joint venture with appellants. The trial court filed findings of fact and conclusions of law holding that appellee's interest in the venture was an "investment contract" and thus a security, that the investment contract was not registered with the State Securities Board, that the investment contract was sold by appellants means of false representations, that appellants were negligent in the management of the venture, and that appellee was entitled to rescind and recover all funds invested or expended by him in the venture.

DISCUSSION

  • On review, the court reversed the trial court's decision and entered a take-nothing judgment in favor of appellants. 
  • The court held that appellee's interest was a joint venture partnership interest, not an "investment contract," within the purview of the Texas Securities Act, Tex. Rev. Civ. Stat. Ann. arts. 581-1, et seq. (1964 & Supp. 1982). 
  • Furthermore, that negligence in the management of the affairs of a general partnership or joint venture does not create any right of action against that partner by other members of the partnership, absent a breach of trust.

CONCLUSION
The court reversed, holding that appellee's investment in the joint venture was not governed by the provisions of the Texas Securities Act. In addition, the court held that appellant was not entitled to recover against appellees based on a negligence theory, absent a breach of trust. The court entered a take-nothing judgment in favor of appellants.

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